The retail sector has a vast majority of sub categories, from food and drink to clothing, to vehicle services. This may be the case but many retail businesses have similarities when it comes to buying, selling or developing a business in this sector.
Buying a retail business
If you are hoping to buy a retail business, location is of utmost importance. Even in today’s digital age, a strong footfall can be the bread and butter of a business. An established coffee shop, for example, may not be running to its full potential next door to a Starbucks, however this may also mean that this coffee shop is in the best location for it’s ideal demographic of coffee lovers.
However, there is much to be said for opening any retail business either where there are many people passing by, or in an area with no alternative, for example, the sole shop in a small village.
It will certainly be a challenge to own a retail shop these days with the competition that the internet provides. However, this can instead be used to work for you instead of against. This could be in the form of a strong social media presence and a website that can be easily found to persuade people to visit your premises. If a business you are seeking doesn’t already have these in place, it is crucial to consider extra time or finances to grow an existing business’s much needed online presence.
Until recent developments a customer would heavily rely on the salesperson to advise them on the best thing to buy and their overall shopping experience. Presently, it is much easier to research the desired items and, in the case of clothing, learn of the latest fashion and accessories.
The time has come for the canny shop owner to actually use the internet for their own ends, as a starting point to both promote their business and to encourage a more personal touch. Rather than the shopkeeper given the opportunity to teach a customer of the latest trends, they must be able to keep informed of the latest trends and prove themselves to the well-informed consumer.
What hasn’t changed, however, is the strength of word-of-mouth. The world used to be smaller, and customers would spread the word of a new shop in their town. Today, as social media is available to almost everybody, any positive or particularly negative views are broadcasted far and wide.
It can be a tricky environment for a business owner to keep up with trends 24/7, but using the likes of Instagram, Twitter or Pinterest can make a huge difference to the number of customers you can entice to your store – it can also be a very purse-friendly form of marketing when using the organic method.
Selling a retail business
If you have decided to sell your retail business, in order to get the most for it you will have to prepare as far in advance as possible.
Many will think about the sale of their business as soon as they have been handed the keys. If this isn’t you, then start thinking about this today.
Make sure that all your tax repayments are up to date, and if there are large outstanding debts or threats of legal issues, that these are dealt with before you even consider a sale.
Your accounts must show considerate – and room for further – growth and expansion, as far back as possible. They must also establish consistent behaviours and patterns. Many sellers will assume they can show their highest amount of turnover in the past year and see this as fit to sell for a good price.
Any buyer doing thorough due diligence however, will see through this unpredictable pattern, and want to see your books as far back as you can provide.
Once you begin to look for buyers, it will be sensible to have a confidentiality agreement prepared. Any serious prospective buyer shouldn’t have a problem with this and you wouldn’t want your private, business insights spread to your competitors.
Try and be as transparent as you can with buyers as they will be more likely to be interested if you can show that you have nothing to hide.
Retail remains a powerful small business sector, once you have everything in place for the buying and development of your business, there are very little reasons not to have a successful and profitable small business.
Jo Thornley joined Dynamis in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.